You Have Been Hired by a Company That Is Transitioning

Essay

You have been hired by a company that is transitioning from a traditional method of product costing to an activity-based costing method.You are assigned to a team that has the responsibility of classifying activities as value-added or non-value-added.One of the team members does not understand the purpose of classifying activities.Define valued-added and non-value-added costs for your team member, give an example of each, and explain how non-value added activities affect product costs.